Overview

This Finance Bill proposes various amendments to UK tax laws, impacting income tax, corporation tax, capital gains tax, inheritance tax, and other duties. Key changes include adjustments to tax rates, the introduction of a new apprenticeship levy, and measures to counter tax avoidance and evasion.

Description

The bill makes numerous changes across various tax areas. Significant income tax changes include the introduction of savings and dividend nil rates, adjustments to personal allowances and rate limits, and new rules for trivial benefits and employment income. Corporation tax changes involve adjustments to the main rate and the abolition of vaccine research relief. Capital gains tax rate reductions are proposed, along with alterations to entrepreneurs’ relief and the introduction of investors’ relief. Inheritance tax adjustments cover an increased nil-rate band and provisions for pension drawdown funds. A new apprenticeship levy is introduced to fund apprenticeships. The bill also strengthens anti-avoidance measures, introduces rules for the taxation of transactions in UK land and intellectual property receipts and includes provisions for the Office of Tax Simplification.

Government Spending

The bill's impact on government spending is complex and not easily summarized with specific figures. While some tax reductions may decrease revenue, the introduction of the apprenticeship levy and other anti-avoidance measures is expected to increase revenue in the long term. The net effect on overall government spending will depend on several economic and behavioral factors following the implementation of these changes.

Groups Affected

• Individuals: Changes to income tax rates, personal allowances, savings and dividend allowances, and capital gains tax rates will directly affect individuals' tax liabilities. The apprenticeship levy may indirectly affect employment through employers.
• Businesses: Corporation tax rate changes, research and development tax reliefs, and anti-avoidance measures will impact businesses' tax liabilities. The apprenticeship levy will directly affect businesses with a pay bill exceeding £15,000.
• Farmers: Changes to profit averaging rules will affect farmers' tax liabilities.
• Pensioners: Changes to pension lifetime allowances will affect the tax treatment of pension benefits.
• Charities: The apprenticeship levy and gift aid provisions will impact charities.
• Financial Institutions: Several provisions specifically target financial institutions and their tax treatments.
• Property Owners: Amendments to property business deductions and the treatment of transactions in UK land affect property owners and developers.
• Individuals with offshore assets and liabilities: The bill introduces several provisions to tackle tax avoidance and evasion relating to offshore assets and activities.

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